Medicaid Expansion: Budget-Busting Reform

California has chosen to indulge its poor with what President Obama might call the "Cadillac version" of Medicaid, with all the optional equipment, and no pesky documentation requirements. As a result, financial chaos looms.

Medicaid covers nearly 60 million individuals.  In 2007, states and the federal government spent $319 billion on the program. 

California's elected decision makers have expanded both program eligibility and benefits without demanding accountability, efficiency, quality or access to care. 

Taxpayers, many of whom struggle to afford basic health coverage, face the fiscal mess left by indulgent politicians who have never met a healthcare-related special interest they wouldn't reward.

The federal Deficit Reduction Act of 2005 limited Medicaid eligibility to U.S. citizens or resident aliens. However, California covers those with "unsatisfactory documentation status" by financing the coverage with state rather than federal funds.

Benefits vary widely among different states.  To qualify for federal matching money, states must cover basic health benefits like hospital care and visits to doctors.

States may choose to cover more than thirty additional "optional" benefits, including case management services, orthodontics, prosthetic devices, personal care services, hospice care and private duty nursing.

Over two-thirds of all Medicaid spending is related to optional benefits. 

In California, the highest number of non-mandatory benefits is offered to the state's 6.5 million individuals eligible for Medi-Cal.  Some of the services provided are not covered by typical private insurance plans. 

Medicaid imposes a high regulatory burden.  Its low reimbursements -- often less than the cost of providing care -- present a financial challenge for physicians, most of whom keep their office doors open by limiting the number of these patients treated or refusing to accept them at all.  Practices without a significant percentage of privately insured patients are economically nonviable.

With little coordination or fiscal oversight, Medicaid programs are often duplicated by local, regional or statewide programs. 

This is a partial list of programs available in California:

Healthy Families: subsidized health, dental and vision coverage for children up to age 19.  California chooses to cover -- at taxpayer expense -- acupuncture, more than 20 inpatient drug rehabilitation visits per year, biofeedback and elective abortion.

Access for Infants and Mothers (AIM): coverage for pregnant women with incomes too high to qualify for no-cost Medi-Cal.

BabyCal: prenatal care and services related to "encouraging healthy pregnancy choices."

Women, Infants & Children Supplement Nutritional Program (WIC): food coupons, education, nutritional counseling and breastfeeding assistance for low income pregnant or breastfeeding women and their infants.

Family Planning Services Program: birth control supplies, counseling, pregnancy testing and treatment for sexually transmitted diseases.

California Children's Services (CCS): services for seriously ill children in low-income families, as well as coverage of diagnostic services for children regardless of family income.

Child Health and Disability Prevention Program (CHDP): health assessments for children under 21 with Medi-Cal, children up to age 19 with family incomes over 200% of federal poverty level (FPL) and children enrolled in Head Start or state preschool programs.

In-Home Supportive Services (IHSS): home healthcare for blind or disabled children and adults as well as those over age 65.  Covered services include housekeeping, meal preparation, laundry, shopping, personal care and accompaniment to appointments.  This is the fastest growing segment of government-funded healthcare in California.

Breast and Cervical Cancer Early Detection Program (BCEDP): free breast cancer screening for uninsured women over 40 and free cervical cancer screening for those over 25.  Insured women with high deductibles qualify.

Breast and Cervical Cancer Treatment Program (BCCTP): free cancer treatment for men and women of any age, regardless of citizenship or immigration status.  Those insured but with more than $750 in deductibles also qualify.  Uninsured women under age 65 are given full Medi-Cal benefits for all healthcare for the duration of their treatment.

Family Planning, Access Care and Treatment (Family PACT): free breast and cervical cancer screening services.

Individual states have a great deal of autonomy in determining eligibility and benefits for public programs.  It is this autonomy that has contributed to the disaster that is the California State Budget.  Other states would do well to heed California's expensive warning.

Dr. Linda Halderman was a Breast Cancer Surgeon in rural central California until unsustainable Medicaid payment practices contributed to her practice's closure. She now serves as the healthcare policy advisor for California's Senator Sam Aanestad while continuing to provide trauma and emergency services in rural communities.
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